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Jindal's Privatization Deal Uncertain Future: Webcast

Louisiana and the Jindal administration received a jolt last week that could have serious impact upon state services, the healthcare of its citizens, whether or not Louisiana should accept the Medicaid Expansion money offered via Obamacare, and more.

Jindal has embarked on a privatization of state charity systems, but the federal government has balked over the method employed in funding the health care institutions. While Jindal was turned down by the federal government, it was the exact opposite in another case; Jindal turned down the federal government’s offer to fund Medicaid through expansion of Medicaid. These two issues were the topics of the discussion between radio host Jeff Crouere and Bayoubuzz.com publisher Stephen Sabludowsky.

Here is the transcript of the WGSO-Bayoubuzz Google hangout webcast. Please watch the video for the most accurate account.

Crouere: Steve, one of the big things the Mayor was talking about in his speech was a bio-medical corridor and the fact that we're going to have this new hospital on Tulane. We got the new hospital out in New Orleans East. Don't we have a problem now with financing that facility? Didn't we have a big explosive decision that was rendered by the federal government late Friday afternoon?

Sabludowsky: Right, right. It actually was the HHS. Basically, it involves the funding of Medicaid and Governor Jindal's program to privatize the different hospitals.

Crouere: Including the one being built here in New Orleans, right?

Sabludowsky: That's my understanding. The Charity Hospital, yes.

Crouere: That's the big thing that they've been touting. It's going to be generating thousands of jobs. It's taken up so much of Tulane Avenue, this massive construction project. I know part of it is VA, but part of it is also the LSU Medical Hospital, right?

Sabludowsky: Right, right, the health center. So that is an issue. Basically, what happened - and it's very complicated - was that Jindal tried to privatize these facilities. I think there's nothing wrong with trying to do that. I think he should be applauded for doing that, or at least trying to do that. The problem was the funding. He tried to upload in so many words the financing, the upfront money, coming from the private vendors. That would mean that the federal government, the Obama administration at this point in time, would approve that financing arrangement and, as a result, it would mean more Medicaid dollars to pay for the services or reimbursement. So the CMS, which is basically in charge of Medicaid and Medicare, said, "no, you can't do that. It's a donation." So they put a shockwave across the state in terms of the legislature.

Crouere: How is the Jindal administration going to act now? I mean, what are they going to do? What's their next step?

Sabludowsky: Their next step is to just continue with what they're doing, trying to negotiate with the federal government on this. Now, here's the thing: many people from PAR, Public Affairs Research, including Karen Carter Peterson and others said that you cannot take this money; it's a scheme. It's just like what Jindal is trying to do now in terms of putting money in the coastal funds and then taking it out to fund other things just to avoid spending one-time money, which is prohibited. So it's a shell game. The federal government said, "no, you can't do that." Basically, a lot of people warned him about starting this funding process instead of waiting for approval.

Crouere: Well, I've been concerned from the very beginning about the financing of this new hospital. It seems to have been shaky from the start, which is the objection John Kennedy had from the very beginning. What are we going to do now?

Sabludowsky: John Kennedy is actually one of the people who came out early on and said, "Hey, look, you know, this may not be unlawful."

Crouere: He's been vindicated, hasn't he?

Sabludowsky: Well, I think so. Personally, I believe that he's been vindicated many, many times over on so many things that the governor has tried to do. Keep in mind that this is a governor who has gone around the nation and saying that we're doing things in the Louisiana-way, not the Washington-way; that we should not take out a mortgage to fund our government, which is, in essence, what he's doing. Except he's also tapping into all the family resources to fund the current obligations. So he's taking out obligations, again, future loans, to fund current obligations going into different pots of money. He's recycling the money. It's all coming back on him right now.

Crouere: We're hearing, Steve, that the state can be facing a 2 billion dollar shortfall. Some commentators are worried that we could be raiding BP funds to plug a hole in the budget.

Sabludowsky: Well, let me say this. I'm not exactly sure where we are on that in terms of what the hole is. The Jindal administration, through Kathy Kliebert, who is the Secretary of the Department of Health and Hospitals for the state of Louisiana; a Jindal appointee. She's saying that if there's a problem at all, it's going to be the fourth quarter of next year. That's when it's going to be. She says: "We can try to work out a compromise now." The whole thing is that this is a frightening situation. It's a frightening situation for the budget now. The legislative session is soon coming to an end. Senators and members of the House are saying, "Hey, we need to deal with this issue now." One Senator has been quoted to say, "Just do it! Fix it!" That was a Republican Senator. So Jindal is in a hot spot here. He's the one who says that he knows something about healthcare.

Crouere: But aren't legislators to blame, as well? What have they done?

Sabludowsky: Well, you're opening up a can of worms here, Jeff, because they basically have gone ahead and allowed him to do this.

Crouere: They punted. That's what they did. They punted.

Sabludowsky: Well, you know, it ties in to the Medicaid expansion issue. As you remember, a couple of weeks ago, the Jindal administration had essentially pulled a full court press on trying to make sure that the Senate committee did not pass the constitutional amendment or pass it on to the full Senate and the House, which would have allowed the voters to decide upon the Medicaid expansion. So now what you have is possibly 300 million dollars at stake. Some people put it up to 800 million. I don't know exactly what the figure is; I'm doing a conservative take in terms of what Klieberthas said. The numbers are all over the place. Just like 2 billion dollars once Jindal leaves office in terms of a budget hole. So even if it is 300 million dollars, who's going to pay for that? Where is the money going to come from? That's really an issue. That opens up this whole debate about the Medicaid expansion; whether or not we should be taking those dollars to pay for it. Otherwise, we're going to be closing down...

Crouere: But again, those are federal dollars which the government doesn't have. We have 17 trillion dollars debt. To take money for a state budget where the money is not here at the state level, either...it's flowing money either way. The federal government doesn't have it because they're just borrowing it to give it us. We're taking it because we don't have the money. The whole thing is pretty shady as far as the financing, if you ask me.

Sabludowsky: Look, I understand. That's been my main opposition to Obamacare. Everything I've said and written is: "What is it going to do to the budget?" To the deficit. I agree, but let me say this: those people who do believe that we should take the money say, "It's our tax dollars. We're taxpayers of Louisiana. If we don't take the money, the money is just going to go to California or the other 30-something states that are taking the Medicaid expansion." So that's the thing.

Crouere: And then there's an argument saying, "Let the voters decide." I'm not really opposed to letting the voters decide. I don't think we should take it, but let's give it to the voters. I trust the voters to examine it and make the right decision.